【正文】 FORM OF HOTEL MASTER MANAGEMENT AGREEMENT BY AND BETWEEN MHI HOSPITALITY TRS, LLC A DELAWARE LIMITED LIABILITY COMPANY AND MHI HOTELS SERVICES LLC, A VIRGINIA LIMITED LIABILITY COMPANY ARTICLE I DEFINITION OF TERMS1Definition of Terms1ARTICLE II TERM OF AGREEMENT10Term10Actions to be taken upon Termination11Early Termination Rights, Liquidated Damages12Substitution of Hotel15ARTICLE III PREMISES16ARTICLE IV APPOINTMENT OF MANAGER16Appointment16Delegation of Authority16Contracts, Equipment Leases and Other Agreements16Alcoholic Beverage/Liquor Licensing Requirements17ARTICLE V REPRESENTATIONS AND WARRANTIES17Lessee Representations17Manager Representations18ARTICLE VI OPERATION18Name of Premises, Standard of Operation18Use of Premises20Group Services20Right to Inspect21ARTICLE VII WORKING CAPITAL AND INVENTORIES21Working Capital and Inventories21Fixed Asset Supplies21ARTICLE VIII MAINTENANCE, REPLACEMENT AND CHANGES21Routine and NonRoutine Repairs and Maintenance21Capital Improvement Budget22ARTICLE IX EMPLOYEES24Employee Hiring24Costs, Benefit Plans24Manager’s Employees24Special Projects – Corporate Employees25Termination25Employee Use of Hotel26NonSolicitation26ARTICLE X BUDGET, STANDARDS AND CONTRACTS26Annual Operating Budget26Budget Approval27Operation Pending Approval27Budget Meetings27ARTICLE XI OPERATING DISTRIBUTIONS28Management Fee28Accounting and Interim Payment29ARTICLE XII INSURANCE30Insurance30iReplacement Cost31Increase in Limits31Blanket Policy31Costs and Expenses31Policies and Endorsements32Termination32ARTICLE XIII TAXES AND DEBT SERVICE32Taxes32Debt Service, Ground Lease Payments32ARTICLE XIV BANK ACCOUNTS33Operating Account33Payroll Account33Management of Operating Account33Advance of Funds34Reserve Accounts34ARTICLE XV ACCOUNTING SYSTEM34Books and Records34Monthly Financial Statements34Annual Financial Statements35ARTICLE XVI PAYMENT BY LESSEE35Payment of Base Management Fee35Payment of Incentive Management Fee35Distributions35ARTICLE XVII RELATIONSHIP AND AUTHORITY36ARTICLE XVIII DAMAGE, CONDEMNATION AND FORCE MAJEURE36Damage and Repair36Condemnation36Force Majeure37ARTICLE XIX DEFAULT AND TERMINATION37Events of Default37Consequence of Default38ARTICLE XX WAIVER AND INVALIDITY38Waiver38Partial Invalidity38ARTICLE XXI ASSIGNMENT39ARTICLE XXII NOTICES39ARTICLE XXIII SUBORDINATION。 NONDISTURBANCE40Subordination40NonDisturbance Agreement41ARTICLE XXIV PROPRIETARY MARKS。 INTELLECTUAL PROPERTY41Computer Software and Equipment41Intellectual Property42Books and Records42ARTICLE XXV INDEMNIFICATION42Manager Indemnity42iiLessee Indemnity42Indemnification Procedure43Survival43ARTICLE XXVI FUTURE HOTELS44ARTICLE XXVII GOVERNING LAW VENUE44ARTICLE XXVIII MISCELLANEOUS44Rights to make Agreement44Agency45Failure to Perform45Headings45Attorneys’ Fees and Costs45Entire Agreement45Consents45Eligible Independent Contractor45Subleasing46Environmental Matters47Equity and Debt Offerings47Estoppel Certificates47Confidentiality48Modification48Counterparts48LIST OF EXHIBITS50LIST OF SCHEDULESiiiHOTEL MASTER MANAGEMENT AGREEMENT THIS HOTEL MASTER MANAGEMENT AGREEMENT is made and entered into as of this day of , 2004, by and between MHI Hospitality TRS, LLC, a Delaware limited liability pany (hereinafter referred to as “Lessee”), MHI Hotels Services LLC, a Virginia limited liability pany (hereinafter referred to as “Manager”), and for the limited purposes of Article VIII herein, the Landlords (defined below).RECITALS: A. Lessee is the tenant under the Leases (defined below) covering those certain hotel properties, fully equipped with furniture and fixtures, and more particularly described by address location, franchise name and room number information, on Exhibit “A” attached hereto (the hotels, together with all ancillary facilities, improvements and amenities set forth on Exhibit A attached hereto as such exhibit exists as of the date of this Agreement, herein called the “Initial Hotels”).B. Lessee desires to retain Manager to manage and operate the Initial Hotels and any Future Hotels (as defined below), and Manager is willing to perform such services for the account of Lessee, all as more particularly set forth in this Agreement.AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:ARTICLE I DEFINITION OF TERMS Definition of Terms. The following terms when used in this Agreement shall have the meanings indicated below.“Accounting Period” shall mean a calendar month.“Agreement” shall mean this Master Management Agreement, and all amendments, modifications, supplements, consolidations, extensions and revisions to this Master Management Agreement approved by Lessee and Manager in accordance with the provisions hereof.“Am